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  • Annuity : A retirement income you can buy through an insurance policy that provides a guaranteed income for the remainder of your life. 

  • Beneficiary: An individual who receives pension benefits.

  • Cash lump sum: When you retire you can choose to take a one-off cash lump sum on top of a regular pension income. To do this, you generally give up some of your pension.

  • Contribution rates: The regular amount you save towards your retirement. It’s the annual percentage you pay to be a member of your scheme (as a proportion of your Pensionable Pay).

  • Dependant: Someone who depends on you either financially or because of a disability or similar.

  • Deferred member: You are a deferred member if you no longer work for your employer, but keep your pension savings in one of the schemes.

  • Deferred pension: If you remain a deferred member, you will be eligible for a pension when you retire, known as a deferred pension.

  • Final Pensionable Pay (or average salary): The pay used to work out your benefits if your benefits are based on final salary. In a defined benefit pension scheme your benefits are calculated when you retire using your salary near retirement. This is known as your Final Pensionable Pay (or average salary). The amount used to calculate your Final Pensionable Pay will depend on which scheme you are in.

  • Growth rate (or accrual rate): This is the rate by which an employee earns pension benefits. For example, if your growth rate is 60ths or 1.67% then for each year of service you earn 1/60th or 1.67% of your Final Pensionable Pay.

  • Inflation: The change in prices of goods and services over time. Generally, inflation increases each year, which means that goods and services become more expensive. This means it is important that your pension savings increase enough each year to at least match the growing costs of living.

  • Normal Pension Age (or Normal Retirement Age): This is generally the earliest age you can retire and take your benefits in your current scheme without any reduction for early payment. Some existing members have the right to retire before their Normal Pension Age in their current schemes without reduction. Read your member guide for details.

  • Pensionable Service (or Reckonable Service or Qualifying Service): The total number of years and days which count towards your scheme benefits. Your Pensionable Service may be different to the length of time you have worked and contributed to your scheme (e.g. if you have worked part time or had periods of unpaid leave). Pensionable Service includes any service transferred in from previous pension arrangements and any added years of pension you may have purchased and built up.

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